Congratulations on purchasing a new home!
Your new home must meet or surpass the structural requirements and health and safety standards of the Ontario Building Code. And like every new home in Ontario, it is protected by mandatory warranties provided by your builder and backed by Tarion Warranty Corporation (“Tarion”).
Tarion is a non-profit, private corporation established in 1976 to protect the rights of new home buyers andregulate new home vendors and builders1 according to the terms of the Ontario New Home WarrantiesPlan Act (the “Act”). Not only does the Act require builders in Ontario to provide new home warrantycoverage, but they must also be registered with Tarion and enrol every new home prior to the start ofconstruction. Tarion is also responsible for managing a guarantee fund to ensure that builders honour thestatutory warranties, and for enforcing the overall terms of the Act.
Moving into your new home is an exciting and busy time, however, it is important that you set aside someof that time to carefully read through and understand your rights and responsibilities when it comes toyour new home’s warranty. Here, you’ll find all you need to know about your home’s statutory warranties,the responsibilities of both you and your builder, and how Tarion handles statutory warranty claims.
If you are unsure about your rights under your purchase agreement or the Act, you may wish to seek theadvice of a lawyer.
If you have questions that you cannot find answers to on our website, call us at 1-877-9TARION (1-877-982-7466).
For the most part, purchase of a freehold home, (i.e., lot and dwelling) and contract home, (i.e., contract tobuild just a new dwelling) are treated the same — although there are some differences.
Purchases of freehold homes involve situations where a purchaser has agreed in substance to buy both aparcel of land and a residential dwelling unit to be constructed on that parcel of land. Various types ofdwellings fit this category, including a single family detached home, a semi-detached home, a unit in a rowhouse or a unit in a duplex.
What is commonly called a contract home is different in that the land upon which the home is to be builtis already owned by the landowner. The landowner has simply entered into a contract with a builder whowill build a new home on that property. The various differences in treatment of these two forms of newhome purchase are discussed in this Homeowner Information Package but a few important differences canbe summarized as follows:
A new freehold home purchase has deposit protection.
Contract homes on the other hand do not have deposit protection or delayed closing compensation.
Instead of deposit protection, contract home arrangements have protection against financial loss. In general terms this provides protection for any losses suffered by the owner should the builder fail to complete the home. A new freehold home has delayed closing protection. If closing, (i.e., transfer of title and occupancy) is delayed beyond permitted delays, compensation may be payable.
For contract homes, since the landowner already controls access to the land in a contract home situation, the idea of delayed closing, (i.e., transfer of title) protection is inapplicable.
1. "Vendors" are the sellers of new homes and are deemed to give the statutory warranties to the purchaser. "Builders" build new homes. Sometimes the vendor and builder are the same person -- sometimes not. For ease of reference, we will use the term "builder" and it will include a vendor or builder as appropriate.
2. Tarion backstops a certain set of statutory warranties described in this HIP. References in this HIP to "statutory warranty" or "builder's warranty" or your "new home's warranty", in each case, is a reference to the statutory warranties. Any other warranties which the builder may give a purchaser which are different or over and above the content of the statutory warranties, are not backstopped by Tarion and such supplemental warranties, if any, are a matter as between the builder and home buyer.